Question

Samsung Family Hub refrigerator

Discuss the logistics of the new refrigerator from the perspective of the retailer.

What retail price would you set for the new refrigerator? How would you come up with this price?

Answer 1

As the retailer can keep few items in the showroom and store the rest of them in the warehouse or keep with the wholesaler and buy when a customer purchases it. The retailer can directly arrange for the shipment to the customer, in order to reduce the storage cost and improve economic efficiency of its retail space. It can also opt for online business and post a good imagery so that consumers don't have to visit the business and can make educated purchase based on the online specifications. Thus the retailer can again ship it directly to the consumer and save space. The retailer will have to employ a good transport logistics firm which will transport the good efficiently.

Based on the competitors prices and the demand for it the retailer will have to set the price at USD 2.500-2,800. The retailer will arrive at this price based on what samsung is charging and than if it has imported, will charge a markup on it so as to increase margin and profits.

The consumer will set a price based on how much utility he/she receives and economic efficiency and also how competitors goods are priced.